Buy local car policy is needed: Vic oppn

GOVERNMENTS across Australia should buy their car fleets locally to support an industry that benefits the broader national economy, the Victorian opposition says.

Opposition Leader Daniel Andrews was responding to news Holden would shed 100 jobs in Melbourne and a further 400 in South Australia.

A year ago Prime Minister Julia Gillard announced a $275 million rescue deal for the car maker, including $215 million from the federal government, $50 million from the South Australian Labor government and $10 million from the Victorian coalition.

Mr Andrews defended government support for the embattled industry and argued governments should all agree to buy cars locally.

"The thing that should be considered nationally is not a withdrawal from the automotive sector but in fact a national procurement and purchasing, (a) national buy-local campaign, so that every car that can be purchased in any government fleet across Australia is in fact an Australian-made vehicle," he said.

"That would be a step forward, that's the sort of thing that we should be putting on the COAG table and if we have to have an argument, then so be it."

Describing Holden's job cuts as distressing for workers and their families, Victorian Minister for Manufacturing David Hodgett says the federal government's carbon tax has only made things harder for Australia's automotive industry.

"A range of factors are affecting the industry including the high Australian dollar, higher energy costs under Labor's carbon tax and tough global competition," he said in a statement.

Mr Andrews said the car industry produced economic and skill benefits for every state, not just those that built cars.

Mr Hodgett said the state government is committed to working with the automotive industry to secure and strengthen its future, and that Holden had reaffirmed its commitment to an $800 million joint state and commonwealth investment to keep making cars in Australia at least until 2022.